THE FEDERAL COMMUNICATIONS COMMISSION’S ATTEMPT TO REVAMP the 700 MHz D Block could be shaped as much by substance as by timing, with Democrats seemingly in less of a hurry than Chairman Kevin Martin to get the valuable spectrum auctioned before the end of the year.
While Democrats at the GOP-led FCC and on Capitol Hill want federal regulators to take the time to reconfigure rules for a D Block – stranded in the 700 MHz auction after no applicant bid the minimum $1.3 billion for the national public-safety/commercial license – it is a fact that Democrats would gain control of the issue if a re-auction doesn’t occur this year and one of their own wins the White House this fall. It is also true that a hastily arranged re-auction that again fails to produce a financially able winner could benefit major wireless carriers, since such a scenario could prompt yet a third D-Block auction with no strings attached.
Martin was forced to compromise with Democrats on procedural aspects of the D Block – such as lengthening an originally tight initial public comment cycle, initiating follow-up rulemakings and promising to hold an en banc hearing – to secure a 5-0 vote to move the process forward.
Getting it right
“I’m pleased the FCC will allow a meaningful opportunity for interested parties to be heard,” said House Commerce Committee Chairman John Dingell (D-Mich.). “The decision over how to auction the D Block is critical to the future of public-safety communications. I urge the FCC to take the time to get it right.”
Briefing reporters after the FCC vote, Martin sounded less confident about the prospects of re-auctioning the D Block before the end of the year. The 700 MHz spectrum becomes available next February when the cut-over to digital television occurs. The first prong of the D-Block rulemaking is open-ended and seeks feedback on a wide range of issues, including whether the public-private partnership should be retained.
“I . continue to recognize the need to make this spectrum available in the marketplace in a timely fashion, and to provide the public-safety community with a clear path forward to achieving a nationwide interoperable broadband network,” Martin stated. “In this respect, I am committed to moving with deliberate speed to address these issues both thoughtfully and quickly.”
Democratic Commissioner Michael Copps said the FCC is better positioned this go-round to craft rules that could lead to a successful D-Block auction and deployment of an unprecedented dual-use wireless network that provides first responders with interoperability, broadband capability and other functionalities that remain lacking more than six years after the Sept. 11, 2001, terrorist attacks.
“Now that we are not facing a hard-and-fast auction deadline, the right course is to work out the difficult questions in advance – thus providing much-needed certainty and predictability to public safety, potential bidders, their investors, the public, the FCC and Congress,” said Copps. “And make no mistake about it, if I do not think that we have developed workable and specific network specifications before a future auction, I will not hesitate to say that we need to go back to the drawing board and get it right before proceeding any further.”
Commissioner Jonathan Adelstein, the other FCC Democrat, warned against rushing to approve new D-Block rules in advance of a re-auction.
“While I wholeheartedly support the launch of this proceeding today, I do want to counsel for taking a cautious and deliberate approach to an ultimate resolution,” said Adelstein.
Harman legislation
Shortly after the agency’s 5-0 D-Block vote, Rep. Jane Harman (D-Calif.) announced legislation to authorize $4 million to begin funding the Public Safety Spectrum Trust Corp. – the 700 MHz public-safety broadband licensee – that would partner with a winning commercial D-Block bidder under the shared- network model.
“Congress should be involved in this process and ensure that the public-safety broadband licensee, the not-for-profit entity representing public safety in this partnership, is an independent and effective voice for first responders,” said Harman, chairman of the House Homeland Security subcommittee on intelligence, information sharing and terrorism risk assessment.
In addition to a funding component designed to help the PSST defray administrative and operational costs, the Harman bill includes provisions that could indirectly shape the realignment of D-Block rules at the FCC.
“My legislation includes requirements to ensure transparency and promote vigorous oversight by both Congress and the FCC,” Harman stated. “It prohibits the public-safety broadband licensee from accepting third-party funds after receiving FCC grants and from using government funding to repay outstanding debts. The bill also mandates strict reporting requirements to the FCC and Congress.”
To date, the PSST has been funded by loans arranged by its advisor, Cyren Call Communications Corp., and financed through the firm’s venture-capital investors. The FCC investigated allegations surrounding the D-Block’s auction failure, but concluded there was no wrongdoing among key stakeholders. Congress continues to probe the matter.
PSST Chairman Harlin McEwen said he “remains hopeful that the comment period ahead will result in rules bringing about the right partner to build a shared public-safety/commercial network.”
The license’s $1.3 billion reserve price, stringent buildout requirements, penalties for failure of the winning bidder to reach a network-sharing agreement with public safety and a volatile market were among the reasons cited for the D-Block’s demise in the 700 MHz auction.
As such, the FCC is seeking comment on such issues as the rules governing public safety priority access to the network during emergencies; the performance requirements and license term; whether to license the D Block on a nationwide or regional basis; the various fees associated with the shared network; whether it would be appropriate for the public-safety broadband licensee or any of its agents, advisors, or service providers to serve as a mobile virtual network operator; the process for the licensees to negotiate a network-sharing agreement; the potential for requirements that the public- safety licensee be a non-profit organization and that no for-profit entities, apart from certain outside advisors or counsel, be involved; and auction-related issues such as whether to restrict auction participation and how to determine a reserve price.
